email rounding up the latestThe global private funds industry is bracing for one of the most sweeping regulatory reforms in its history as the US Securities and Exchange Commission prepares to impose tough rules on private equity, real estate and hedge funds.
Industry groups warn that because the rules do not exempt existing arrangements, tens of thousands of contracts with investors, some of them decades old, will have to be torn up and renegotiated within the next 12 months. Several are threatening to file a lawsuit, arguing that the SEC is improperly trying to control investment terms by limiting what funds and clients can agree to.
The SEC declined to comment, but chair Gary Gensler defended the reach of the proposal earlier this year,: “Congress said we had a role to consider efficiency and competition in the capital markets . . . They didn’t leave out so-called sophisticated investors.”